Trading in Bitcoin derivatives is increasing as institutional investors flood the market.
The CME group has become the world’s largest market for Bitcoin futures (BTC) after an increase in open interest over the past month, industry data show.
In a tweet on Friday, Arcane Research announced that CME had overtaken OKEx as the world’s largest Bitcoin futures market. Citing data from Skew, a market intelligence firm, Arcane said open interest in CME’s Bitcoin futures contract has reached $1.16 billion. OKEx, meanwhile, registered $1.07 billion.
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„Institutional investors are here,“ said Arcane.
CME’s Bitcoin futures market has more Bitcoin Profit than doubled over the past month, with more traders seeking exposure to the flagship crypto-currency as it approaches its all-time highs. Futures trading can sometimes invoke high volatility, especially as the deadline approaches, as contract holders adjust their positions prior to that date.
Its November futures contract, BTCX20, expires on Friday.
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The Binance and Huobi cryptoexchanges have also emerged as important futures players. Based on open interest, they are the third and fourth BTC futures platform, respectively.
Bybit, which also appeared on Arcane’s list, announced earlier this week that it will soon launch a quarterly Bitcoin futures contract.
The futures market is an important indicator of Bitcoin’s adoption because it means traditional investors are entering the environment. While the 2017 bull market was largely driven by retail traders, the current upward trend has been fed by deeper institutional pockets.
CME, in particular, is becoming vital to Bitcoin’s price discovery, according to investment manager Wilshire Phoenix.
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The importance of WECs „is not only demonstrated through trading volume and open interest,“ said Wilshire, „but also through the influence on spot price formation.
Bitcoin’s price is currently consolidating in the $16,500 range after a massive Thanksgiving Day sale.